Slide Show | November 2008

SAFE HAVENSIN REAL ESTATE

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With foreclosures skyrocketing and home prices plummeting, real estate has been hit hard by the recession. But in certain pockets across the country, the dip in values has been minimal -- if nonexistent.

We found six cities with slow, steady growth, using data from Fiserv Lending Solutions, a home-price research company. These cities' local economies have kept unemployment and foreclosure rates below average. Plus, their affordability index -- a measure of home prices versus family income -- is low.

For comparison, we also pinpoint an average market and the worst market in the country. Take a look at these safe havens:-- By Louis Jones

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SAFE HAVENSIN REAL ESTATE

LANCASTER, PA.

Lancaster Chamber of Commerce & Industry

Metro area population: 498,465Median home price: $203,00012-month change in home value: -0.1%Affordability index: 3/10Homes sold in 2008: 4,422Home value vs. national average: +1.5%Top employer: R.R. Donnelly & Sons publishing companyKnown as an Amish cultural hub, the city is also home to a diverse group of industries, including printing and food processing. This helps keep the local market stable and unemployment low, as losses in one sector aren't devastating to the overall economy.

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SAFE HAVENSIN REAL ESTATE

CLARKSVILLE, TENN.

Clarksville-Montgomery County Economic Development Council

Metro area population: 265,062Median home price: $129,00012-month change in home value: +0.8%Affordability index: 3/10Homes sold in 2008: 2,767Home value vs. national average: -36%Top employer: Trane Corporation
Clarksville offers an affordable alternative to nearby Nashville but is close enough that residents can enjoy the larger city's attractions.

The housing market is kept active by Clarksville's proximity to Fort Campbell. Traditionally a manufacturing town, the city also offers a robust retail economy, driven in part by Austin Peay State University.

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SAFE HAVENSIN REAL ESTATE

ALBUQUERQUE, N.M.

Marble Street Studio

Metro area population: 832,774Median home price: $275,00012-month change in home value: -0.5%Affordability index: 3/10Homes sold this year: 8,144Home value vs. national average: +37.5%Top employer: Intel
While other midsize cities have fallen prey to rampant speculation, Albuquerque has hovered below the national real estate radar and largely avoided the subprime mortgage debacle. An influx of tech companies such as Eclipse Aviation, Hewlett Packard and Intel has helped fuel this Southwestern city's economy and attracted a young creative class.

Active retirees and immigrants have also migrated to the area, ensuring a well-rounded housing market. Experts project 9% population growth between 2006 and 2011, compared with 6% nationally.

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SAFE HAVENSIN REAL ESTATE

BURLINGTON, VT

Lake Champlain Regional Chamber of Commerce

Metro area population: 145,360Median home price: $266,00012-month change in home value: -1%Affordability index: 4/10Homes sold in 2008: 1,668Home value vs. national average: +33%Top employer: IBM
On the shores of Lake Champlain, Vermont's largest city focuses on retaining its high standard of living rather than growing its population. Strict zoning standards make home building difficult and discourage speculators.

Burlington's small-town mentality ensures that home lenders maintain personal relationships with their clients and help them stay within their spending means. Technology, health care and education drive the local market.

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SAFE HAVENSIN REAL ESTATE

PITTSBURGH, PA.

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Metro area population: 2,355,712Median home price: $136,00012-month change in home value: -0.3%Affordability index: 2/10Homes sold in 2008: 26,028Home value vs. national average: -32%Top employer: University of Pittsburgh Medical Center
Although Pittsburgh home sales have dipped 16% this year, the properties have retained their value. This "Pittsburgh paradox," as it's called by locals, is attributed to the city's steady population growth and the construction of new, high-value homes.

Despite its reputation as a gritty city of industry and steel, Pittsburgh is now driven by the health care and technology sectors.

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SAFE HAVENSIN REAL ESTATE

JOHNSON CITY, TENN.

Johnson City Economic Development Board

Metro area population: 193,554Median home price: $125,00012-month change in home value: -0.9%Affordability index: 3/10Homes sold this year: 4,534Home value vs. national average: -38%Top employer: East Tennessee State University
Demand in this Northeast Tennessee city's market is largely driven by East Tennessee State University, as well as new retirees. These "halfbacks" used to spend summer in the North and winter in the South but are now making Tennessee their home year round.

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SAFE HAVENSIN REAL ESTATE

AVERAGE MARKET:WASHINGTON, D.C.

Washington, D.C. Convention and Tourism Corporation

Metro area population: 5,306,125Median home price: $378,00012-month change in home value: -18.5Affordability index: 4/10Homes sold in 2008: 63,100Home value compared to national average: +89Top employer: Federal government, George Washington University
While sales are still high, an overabundance of new homes in the Washington suburbs has lowered values. Northern Virginia's Prince William County is among the hardest hit by the subprime crisis in the country, with 865 foreclosures so far this year -- four times more than neighboring Fairfax County.

Homes in D.C. proper, however, have retained their value. This is because the city has little undeveloped land for new homes to be built, thus preventing speculation.

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SAFE HAVENSIN REAL ESTATE

WORST MARKET:CALIFORNIA CENTRAL VALLEY

Greater Stockton Chamber of Commerce

12-month change in home values:
Merced: -42.8Salinas: -42Stockton: -41Modesto: -37.9Vallejo: -35.9
The market hit hardest by the housing bubble is the Central Valley in California, where aggressive development and price hiking has yielded more homes than jobs. Now many homeowners owe more than their house is worth and are being forced into default.

Still, it's not all doom and gloom for the California housing market. The drop in home values has created an affordable market for first-time home buyers. And, on average, monthly sales have almost tripled from last year. Although the Valley has seen the worst of the crash, it may well be one of the first areas to recover.